Infosys shares will remain in focus after Morgan Stanley retained its ‘Equal Weight’ rating with a target price of Rs 1,380, as the IT major sharpened its AI-led growth narrative. The company recently released its AI-focused Integrated Annual Report for FY26, underscoring its shift toward an AI-first strategy. This was followed by two key deal announcements on June 2, an expanded partnership with Norway’s DNB Bank to modernise financial crime operations and the launch of an AI-driven editorial platform for Germany’s Handelsblatt Media Group.
On June 2, Infosys announced the expansion of its collaboration with DNB Bank ASA (DNB), Norway’s largest bank, to modernise its Financial Crime (FinCrime) operations using NICE Actimize X-Sight Enterprise platform. Through this engagement, Infosys will help DNB transform fragmented, legacy systems into a unified, intelligence-driven, cloud-native platform that enhances risk insights, improves detection accuracy, and strengthens multi-jurisdiction regulatory compliance
Morgan Stanley on Infosys
Infosys reported an in-line performance for Q4FY26, with revenue, EBIT and margins largely meeting expectations, while profit came in ahead. Dollar revenue declined 1.2 per cent QoQ to USD 5,040 million, though better than estimates, and constant currency revenue fell 1.3 per cent QoQ. In rupee terms, revenue grew 2 per cent sequentially to Rs 46,402 crore, while EBIT rose 1 per cent to Rs 9,743 crore. EBIT margin slipped about 30 bps QoQ to 21 per cent, broadly in line with estimates. Net profit stood out with a strong 27.8 per cent QoQ jump to Rs 8,501 crore, beating expectations. The company announced a final dividend of Rs 25 per share.
Operationally, the quarter reflected a mixed trend. Large deal total contract value (TCV) came in at USD 3.2 billion, down 33 per cent QoQ but still ahead of expectations, taking the full-year figure to USD 14.9 billion. Free cash flow stood at USD 0.8 billion, while attrition edged up slightly to 12.6 per cent. Infosys added 111 new clients during the quarter. Segment-wise, Financial Services remained the largest contributor at 28 per cent, followed by Manufacturing (15.9 per cent) and Energy, Utilities & Services (13.2 per cent). Geographically, North America continued to dominate with a 55.7 per cent share, followed by Europe at 32.6 per cent.
Looking ahead, Infosys guided for modest growth, projecting FY27 revenue growth at 1.5–3.5 per cent, slightly lower than FY26 guidance, while maintaining operating margin guidance at 20–22 per cent. Management highlighted continued strength in large transformation deals and its enterprise AI capabilities. CEO Salil Parekh emphasised the company’s “AI-first” strategy and Topaz platform as key differentiators, while CFO Jayesh Sanghrajka reiterated a focus on margins and cash generation amid macro uncertainty.
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